If you are employed in a company, you must be paying provident fund from your salary. Normally in case of employees, employer deduct PF every month and remit.
But, in case of self employed, Public Provident Fund or PPF is best option for retirement planning.
I love PPF for many reasons.
Do you know, PPF is the only investment which can not be touched by even government.
Every business owner or person should invest in PPF for reason that it is insolvency proof.
PPF was launched in year 1968 to encourage saving habits.
It is highly popular for it being exempt from taxes. Interest earned on PPF accounts is exempted from tax, you can also claim investment under section 80C of income tax.
PPF account can be opened in any bank or post office.
PPF accounts come with a maturity period of 15 years.
Maximum investment in PPF account can be made for Rs. 1,50,000 in a year.
Investing in a PPF account is highly suggested. As a businessman, what option do we have for retirement funds? PPF is best suited for retirement funds.
Benefits of investing in PPF account are:
The biggest advantage I see with a PPF account is that it cannot be attached for any matter.
Take an example, you took a loan for your business but for some reason business failed. Bank will start selling your personal assets to recovers its dues. However bank or court cannot attach your PPF account and that means your money invested in PPF is safe.
Interest rate on PPF account is revised every year.
It keeps changing with inflation and other factors.
Here is a record of historical PPF interest rates.
|Financial Year||Interest rate (p.a.)|
|2016 – 2017||8.1%|
|2015 – 2016||8.7%|
|2014 - 2015||8.7%|
|2013 - 2014||8.7%|
|2012 - 2013||8.8%|
|2011 - 2012||8.6%|
|2010 - 2011||8.0%|
|2009 - 2010||8.0%|
|2008 - 2009||8.0%|
|2007 - 2008||8.0%|
|2006 - 2007||8.0%|
|2005 - 2006||8.0%|
|2004 - 2005||8.0%|
|2003 - 2004||8.0%|
|2002 - 2003||9.0%|
|2001 - 2002||9.5%|
|2000 - 2001||11.0%|
Interest rates are really good and better than FD or RD account. Further tax is not charged on interest earned thus effective return on PPF will way more higher than returns on FD accounts.
PPF investment is one of the most popular and highly rated option for retirement planning.
It is a very rare investment with attachment proof. Business is uncertain, you must open a PPF account to save some amount for your retirement.
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